Home Office Deductions - Changes for FY23
The ATO has introduced new rules for FY23 that can impact your tax return. We will touch on what these changes are to allow you to prepare appropriately. There is some very important changes to record keeping requirements which will cover.
This what you need to know:
New fixed rate introduced
The fixed rate for home office expenses has increased from 52 cents to 67 cents per work hour. This means you can claim a deduction of 67 cents for every hour you work from home, for expenses such as internet and phone usage, electricity, gas, and stationery.
Shortcut method removed
The ATO has removed the shortcut method for FY23. This means you can no longer claim a deduction of 80 cents per work hour as an all-inclusive deduction for home office.
Expenses contained by the fixed rate
The fixed rate contains the following expenses:
Home and mobile internet
Mobile and home phone usage
Electricity and gas for heating, cooling, and lighting
Stationery and computer consumables, e.g. printer ink and paper
Expenses not contained by the fixed rate
The fixed rate does not contain the following expenses:
Work-related use of technology and office furniture e.g. desks, chairs, computers and monitors. Alternatively, any decline in value of assets can be deducted separately.
Record-keeping requirements
To claim the home office deduction using the fixed rate, you must keep the following records:
From 28 February 2023 individuals are required to keep a record of the number of actual hours you work from home during the entire income year – for example, a timesheet, roster, diary, or other similar document. (A 1-month diary is not sufficient)
A representative record of the total number of hours worked from home during the period from 1 July 2022 to 28 February 2023 will be sufficient.
Diligence is key
It's crucial to maintain accurate records of your work hours and expenses in light of the ATO's new regulations for home office deductions. Remaining diligent of this will allow you to include the greatest deduction in your tax return. If you have any questions on home office deductions please get in contact with us.